A future without fraud: the latest developments in fintech that keep your money safe

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We are concerned about our safety. We worry about our money. We are concerned about the safety of our money and our identity.

And there are good reasons for that.

According to the consulting firm Aite-Novarica Group, 47% of the U.S. population will have experienced some form of financial identity theft in 2020. CNBC recently reported that $5.8 billion will be lost to fraud by 2021 — a 70% jump from 2020. And it’s not just a U.S. issue — nearly half of respondents in a Canadian survey claimed at some point in their careers. to have been the victim of financial fraud.

Fortunately, technology is advancing in several effective ways, allowing banks, credit card companies and other financial institutions to better protect our funds and our identities.

Here’s an overview of some types of technological advancements that are being implemented for security purposes in the financial industry.

Artificial Intelligence and Financial Security: Your Credit Card’s Personal Bodyguard

Credit card companies use AI to detect fraud cases. Hackers and fraudsters regularly target credit cards – it is one of the most targeted areas for cyber criminals – but by implementing AI, the card companies and card users can be immediately alerted at the slightest sign of unusual activity.

For example, in 2019 Visa used AI to identify fraudulent activity by examining more than 500 transaction characteristics in real time. Thanks to these tools, approximately $25 billion worth of fraudulent transactions were identified that year.

American Express has been using AI technology since 2010, going so far as to port all of its risk management systems to AI in 2015 — much earlier than most. Amex’s VP of Risk Management has said their digital fraud resolution rate has improved by 100% since they implemented their AI-based fraud solutions in 2014.

The sooner we and the credit card companies are alerted to signs of fraud, the faster we can block the criminals responsible and work to set things right. And the more information we add to the AI ​​algorithms, the better equipped we are to detect fraud in the future. AI is the weapon we need to fight this battle.

As time goes by, the better the algorithms get — with each passing day — you and your family can feel more secure in the dangerous world of financial fraud.

Biometrics is not futuristic, it is here and now

Yes, biometrics is a form of AI, but it deserves individual attention here.

Biometrics is an area that uses our biological measurements, physical features, and physical properties for identification purposes. Examples of how this is used in security include:

speech recognition, fingerprint scans, facial recognition, iris recognition, vein pattern verification and heart rate sensors.

There are many industries, companies and products that use biometric security, including the banking and credit card industries. These methods are especially useful for identifying and combating fraud in the financial sector when:

opening accounts, making ATM transactions, mobile banking and online banking.

TD Bank encourages its customers to register for its speech recognition technology, TD VoicePrint, which allows software to identify the speaker who calls to chat with a customer service representative. The technology works in the background while the customer and the service representative talk to each other.

Wells Fargo uses something similar.

In 2015, The Royal Bank of Scotland ditched the passwords and launched a service that uses fingerprint scans to log customers into their accounts. And there’s a UK bank that has been trialling a technology that used customers’ unique heartbeats for identification (at the time of writing, no evidence could be found that this trial was being used on a permanent basis).

It will be interesting to see where progress in this area will take us, but it is safe to say that biometrics will continue to be an important tool for financial security.

Transparency and security with blockchain

Much of the above information sounds rather futuristic and sci-fi-esque, but blockchain technology has beaten them all.

Blockchain technology is (partly) a database in which information is stored in digital format. You’ve probably heard of it in regards to cryptocurrency systems – crypto transactions are secure and different from the highly centralized, bureaucratic systems the major banks operate in.

Unlike traditional banks that are unlikely to ever show their data to the public, blockchain is a transparent, secure process. Simply put, blockchain is a digital ledger of transactions that is publicly accessible and very difficult to change. Every transaction is recorded and recorded in the ledger of every participant and is visible at all times.

And while these transactions are transparent, those making them can still remain anonymous.

Virtual credit cards are real

Virtual credit cards are already a thing – these unique credit card numbers can be used online or in person through your digital wallet. And you don’t even need to apply for a new credit card to use this technology. Often you can just add your current credit or debit card to your digital wallet and it will automatically convert to a virtual card.

Some card companies offer the option of generating a single-use virtual credit card so that you can dispose of the information once you’ve made a purchase. This adds a whole new level of security to online transactions.

Based on this information alone, it is easy to understand why many financial experts predict that we will all be using cryptocurrency in the not-too-distant future.

Optimism in the future of financial security

This is just a small example of the mind-boggling technological advancements being used for security purposes in the financial sector. As time goes by, financial security technologies will continue to grow and expand, introducing new knowledge and systems to make your finances and future more secure.

There is always a bit of concern when it comes to the safety of our money, but as each year goes by, we go exponentially fast in discovering something new.

If we’ve progressed this far in AI, virtual currencies and biometrics over the past 20 years, just imagine where we’ll be in 20 years. We can now envision a world where we are financially secure and a world where our children and their children are little concerned about fraud. It may be time to imagine a world without any fraud at all.

Melanie Pitman is content specialist for credit cardGenius.ca

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This post A future without fraud: the latest developments in fintech that keep your money safe

was original published at “https://venturebeat.com/2022/04/17/a-future-without-fraud-the-latest-advances-in-fintech-that-keep-your-money-safe/”